January - February Expenses

The first month of my fiscal year has gone by.  I've made some changes lately that I hope to see bring my expenses down but I might not see the effects of them for a few months down the line.  My recent change to a prepaid plan is one example.  I should also be receiving a raise at work soon as well as the first part of my transportation expense in April.  This should go a long way in helping me hit my yearly goal of stashing 55% of my salary in 2013.

For January to February I had:

Income:
Paycheck: ¥299,904
Part Time Job: ¥16,619
Xmas Money: ¥8,970
Gympact: ¥1,794

Total:  ¥327,287

A respectable month I suppose. For some reason my taxes went up about ¥500 so it's pushed my main pay check under ¥300,000. My forthcoming raise should push my back up over however. I did some moderate work at my weekend job, received some late Christmas money and got paid twice from Gympact.

Expenses:

Total:  ¥173,275

Doing the math that leaves ¥155,012 left over that I invested.  That's a 47.36% savings rate.  Hmmm...  Well, that is below 55% but it's still pretty respectable.  As always dining out restaurants was expensive.  In this case it had to do with "entertainment" as well.  As I outlined before "entertainment" expenses and "eating out" expenses tend to go hand in hand.  In this case we went out with a spend-aholic friend of mine (doesn't make him a bad guy!) to watch sumo.  It was great but I paid for the ticket for both me and my GF and also for lunch and some of dinner.  That right there was probably 10% of my spending for the whole month!  And, just imagine this buddy of mine lives like this all the time!  

Bills were still quite high as I paid off my last month of Softbank postpaid service.  I also had to visit a clinic as I was having some pains in my wrist last month.  

A quick note as well.  Starting next month I will no longer be counting the "House" as an expense.  This will start going under my investments.  I think it's starting to get closer to being a real vacation house that can be rented out and that the money I'm putting into is not just getting thrown down the toilet like on a cellphone.

Going Prepaid

A number of months ago MMM described how he lowered his cellphone bill by almost 90% by going prepaid and using an MVNO service.  He was able to unlock his iPhone and keep it's functions while paying a fraction of the price.


I, like most people, have had a cell phone for a number of years and just accepted that it's ¥8,000 (about $90) a month for the privilege.  I shopped around as much as I could for a cheaper plan but for a smartphone ¥8,000 is about as good as it gets.  In fact if you want one of the newer models, like the iPhone 5 with LTE service, it's going to cost you even more money.

Since waking up and doing my best to crawl out of the consumer sand trap I knew there had to be a better cheaper way to get cell service even in a country like Japan.  Low and behold there was and is.  Prepaid.

You're getting what!?!

People seem to gawk when you mention prepaid service.  It has an air of being unrefined or less prestigious than post paid service.  I don't know if it's the more expensive rates (which is true, prepaid is in general more expensive on a minute per minute basis), the idea that people on prepaid must not use their phone much and therefor not be social and popular person, or that prepaid phones tend to be bare bones and boring.  

Well I never used my smart phone much for calling so the rates didn't really matter to me.  I stopped caring quite a while ago about my phone as a status symbol and, finally, I started to question just how useful smartphones really are.

Let's talk about what I had.  I bought an iPhone 4 two years ago with Softbank.  I paid ¥4,200 a month just for data.  It was unlimited but I couldn't tether to a computer and while the speed was decent I found I was usually at home or at work where I have wifi.  My calling plan cost ¥980 a month for the "White Plan."  On Softbank you don't receive a bucket of minutes instead you pay a price for certain rate.  On the "White Plan" I received unlimited calling to other Softbank customers from 1am to 9pm every day and after 9pm or if I called outside of the Softbank network it was ¥21 for 30 seconds (basically about $0.50 a minute).  In addition there was a "discount features set" for about ¥500 (voice mail, call waiting, caller ID, etc...) and then the cost of the phone itself was broken up over the life of the contract (Japanese carriers don't subsidize the cost of the phone directly).

Sounds pretty standard but I'm not looking for standard.  I barely called anybody except maybe my GF, and I really wasn't using the data plan.  Other than emailing, and texting, I used my phone to check Facebook quite often or maybe mess around with a random app.  However, other than apps to track stocks there wasn't a useful function for the smartphone.

Not mine but similar

So I decided to drop the whole box of rocks when my contract came up for renewal and get prepaid service.  For ¥8,000 (what my plan was costing me per month) I got a brand new "dumb phone" and a prepaid calling card.  What does my plan look like now?  Well I'll tell you there really is no comparison.  Softbank prepaid looks like this:

-Register a ¥3,000 yen card for 60 days.  If you don't register a new card 60 days from that card your minutes expire.  If you register a new card everything rolls over for another 60 days.  So basically I pay ¥1,500 a month.

-Calling rates are ¥90 a minute (about a dollar per minute, but remember I use about five minutes a month to call out).

-¥300 yen a month (which comes out of the ¥3000 prepaid card) for UNLIMITED email and texting.  I can text or email both Softbank subscribers and people on other networks.

-Incoming calls are completely free.  If I receive a call I can talk for an hour or ten and there is no charge to me.  And if the other person is a Softbank subscriber it's free for them to call me!

-Even if my minutes expire and I don't register a new card I can still receive incoming calls and I keep the same phone number and email for a year.  So if I go home for two months and don't want to pay I just let my time expire and start up again when I come back.

-The dumb phone is actually pretty smart.  It has a nice color screen, plays music, videos, and even has a built in TV tuner!  I can take movies and photos with it and still email them out.  Frankly it does just about everything I was doing on my iPhone.

-Perhaps the best feature is I have choices now.  If it doesn't work out I can always go get another contract.

Also, I still use my iPhone 4.  Even without network service the GPS works like a champ for tracking my bike rides in Runkeeper and sending that data to Gympact which net's me about $10 a month.  The iPhone still works on wifi so it's great for checking my email or stocks while I'm at my desk (which was where I checked that stuff anyway).  When I do find myself out and about without data I noticed that I don't miss Facebook or looking up random news articles on Lifehacker.  Now I read, study Japanese, or listen to music.  In addition there are still ways to interact with Facebook via email to post status updates and pictures.  Plus most if not all my friends still have smart phones on regular plans.  If for some reason I just have to know who was in "The Devil's Advocate" (Keanu Reeves, Al Pacino and Charlize Theron, released in 1997) I can ask a buddy.

Looking at the long run this move will save me almost ¥80,000 ($900) a year or more in cell phone related charges.  The only downside is I have to carry both the cell phone and my iPhone with me but I'm still looking into getting my iPhone 4 unlocked and using it as the prepaid phone.  Unfortunately Softbank does not supply unlock codes to it's customers even after they are off contract.  :(

It's been about one month since I made the switch and I'm very happy.  It's actually nice to have a phone that is just a phone again.  It's not complicated and the money I'm saving and investing could buy me cell phone service for life!  Now, that to me sounds like a plan.

2013 Goals

Not going to make this a long post.  My goals for 2013 are pretty simple.

1.  Savings rate of 55%

Last year I went for 60% and ended with below 50%.  I had some big expenditures last year which I don't see needing to pay this year.  I should also get a raise at work.  60% might still be a bit out of my reach but I'd rather shoot for the moon and crash land than not even bother leaving the house.

2.  Floss every night.

This might sound pedestrian but it's the little things that make all the difference.  Perhaps if I had taken better care of my teeth I wouldn't have had to pay so much in dental bills last year.  I have been flossing every night since December 28th last year with maybe one or two misses.  I believe it takes 66 days to form permanent habits so I'm well on my way.

3.  Do at least 5 pull-ups a day in January, 6 in February, 7 in March, etc.

Almost like the flossing you have to start out small and work your way up.  I need more upper body strength for biking plus I would like to work out both my upper and lower body.  Biking gives me legs quite the work out so I need another activity to keep things even.

4.  Dividends of $1000.00

I'd like to think I can hit this.  Last year I ended just shy of $400.00.  If I can reduce expenses to free up more capital for investing in dividend growth stocks I think I could hit this.  Again, shoot for the moon...

That's it.  Pretty simple.

2012 A-Wrap Up

I'm a sit back and look kind of guy.  I don't always like to be the first person in the pool but I'm also not usually the last.  I'm the guy who probably goes third or fourth... okay maybe fifth.  I don't want to miss an opportunity but I also know lots of people who dive in head first with no thought and end up with broken finances in the money sense or, literally, broken bones in the real sense.  If they had just taken three seconds of thought and about how to jump into the pool (perhaps feet first?  what about entering slowly then jumping in the second time?) perhaps they wouldn't be over their head financially, emotionally, or even physically.

A lot of the blogs I peruse have done 2012 wrap ups.  I've sat back and see no danger in it so I'll go too.

I track my expenses manually.  Unfortunately Japan doesn't have a service like Mint.com as most transactions still take place using cash.  Every purchase I make is recorded via an Excel worksheet of my own design.  Okay, I might have copied this Youtube video to build the initial credit/debit tables.  The rest, however,  is all me.  I have learned a lot about Excel and about my spending habits.  Because this is all a manual deal however it's not completely accurate.  I had some trouble with how to account for my credit card purchases at first, and getting all the correct categories to separate my spending into took time as well.  Sometimes I just drank too much and couldn't remember where that missing 500 yen went!  In the end I think I've built a system that really works for me and was about 90% accurate last year.  It is completely customizable and the data is mine all mine!  I can sort it, copy it, delete it, account for it, and store it in any way that I see fit.  Frankly I don't know that I could use a system like Mint.com even if I moved back to the states.  There is nothing wrong with it, I just have gotten used to a certain level of control.

Anyone for pie?  Chart that is!

It's not the prettiest thing but it is what it is.  If your not a visual learner here is the straight dope in sterilized Excel format.

Rent	$  6,875.47	23.18%
Eating Out	$  4,913.44	16.56%
Air Travel	$  2,972.79	10.02%
Groceries	$  2,112.20	7.12%
Bike	$  2,086.62	7.03%
Bills	$  1,892.50	6.38%
Transportation	$  1,649.95	5.56%
House	$  1,540.00	5.19%
Medical	$  1,475.03	4.97%
Entertainment	$  1,053.04	3.55%
Present	$     475.64	1.60%
Alcohol	$     472.45	1.59%
Misc	$     434.34	1.46%
Car	$     278.81	0.94%
Mail	$     230.23	0.78%
Gas	$     225.87	0.76%
Travel	$     209.81	0.71%
Clothing	$     166.66	0.56%
Lodging	$     145.33	0.49%
Gadgets	$     109.07	0.37%
Grooming	$     104.37	0.35%
Electronics	$      71.39	0.24%
Videogames	$      65.71	0.22%
Fee	$      47.73	0.16%
Tuition	$      25.06	0.08%
Missing	$      20.53	0.07%
School Supplies	$        6.58	0.02%
Kitchen stuff	$        5.26	0.02%

All percents are shown as a portion of total expenses, not a percent of total after tax income.  Let's dig in!

RENT - Like most people Rent probably makes up the biggest part of your pie.  There is not a whole lot that I feel I can do about this at this point.  In fact I think we hit the jackpot as our location is:  within biking distance to EVERYTHING, twenty minutes away from a major international airport, a five minute walk to the closest train station, in the neighborhood of almost all our friends, and the list goes on.  I don't see this number going down next year.  In fact my rent as a portion of my expenses will probably go up!  If I can reduce other expenses but my rent stays constant math takes over and it's position as a proportion of expenses will go up.  Possible savings:  0.00

EATING OUT - Next was eating out.  This includes restaurants, drinking, vending machines, etc.  Any food that I didn't buy at the grocery store and prepare at home.  Costco hotdogs and pizza included.  I always knew that this number was going to be high since I started keeping track of my expenses.  I'm a social person and I really do enjoy a good drink with friends.  As much as I can I try to eat before I go out to soften the damage to my wallet.  This is an expense that I would like to see decreased in 2013.  If I could reduce this category by even $500.00 to $1000.00 I would be really happy!  Possible savings:  $500~$1000

AIR TRAVEL - What can I say?  Airline tickets are expensive.  BUT this year my GF and I have decided to travel locally and explore more of Japan.  This is great I think!  The GF does have a wedding to attend and I have been given a get out of jail free card in that respect.  I do know the bride and the groom and would love to attend so who knows I just might jump on a plane over the Pacific yet.  But it would be a short trip (3-4 days max) which helps to cut down on other expenses like gas, insurance, eating out, etc.  I've been pushing for us to take more bicycle based trips and we already have two in the works!  I'd like to see this expense cut in half for 2013.  Possible savings:  $1500

GROCERIES - $2,112/12 is $176 a month.  That is only what I spend but my GF and I do a pretty good job of subsidizing each other.  Things bought at Costco are split 50/50 and most of the grocery shopping is shared.  If this went up to about $200 a month but eating out at restaurants etc decreased by 20% I'd by super duper happy.  Possible savings:  -$180

BIKE - As for the bike there is nothing to worry about here.  Most of the items in this category were one time sunk costs anyway.  I've got the bike, handlebar bag, lights, pump, travel bag, etc.  Things like tires, tubes, cable wires, break pads, and chain lube are cheap.  I've mentioned I still have a few items left to pick up like a rack and panniers but if this category fell by 75% (to about $500) I wouldn't be surprised. Possible savings $1500

BILLS - Here is another expense that is targeted for obliteration.  My bills are surprisingly cheap.  They are split with my GF and internet, electricity, gas, and water cost me about $80 a months if not less.  To be honest it's the cell phone that really killed me this last year.  But that's been taken care of.  I've switched to prepaid which should save me almost $700-$800 a year.  Let's go for an easy 50% reduction if not more.  Possible savings:  $900

TRANSPORTATION - Most of my transportation costs last year was for train passes.  As I've written about several times this is now getting paid to me as I have a bicycle that spits money from it's tires.  Other transportation costs are for bullet train tickets to visit friends in other parts of Japan.  Maybe I'm being brazen but I think reducing this by 50% is completely conceivable.  Possible savings:  $1000

HOUSE - This will stay where it is.  I will continue to try and help out my family with this house.  Perhaps one day it will pay me back.  Possible savings:  $0.00

MEDICAL  - Like transportation I think this could be reduced to almost nothing.  I had some huge dental bills last year that hit me hard.  I never had regular dental visits growing up and didn't always brush my teeth regularly.  As I've gotten older I've had to start paying for this.  I now brush two to three times a day and floss once.  In addition I try to have regular dental visits every three months.  With three or four dental visits a year and each coming in at around $20 this is a major category for saving cash.  Possible savings:  $1400

ENTERTAINMENT - Coming in at around only $1000 a month entertainment includes all things movie, baseball, ice skating, museum, tourist, and sumo wrestling related.  Entertainment is a funny one because it seems very low (about $80 a month) but it bleeds into other places quickly.  Going to a baseball game?  Well now we need beers and food.  That's going into the "eating out" area.  Want to watch sumo?  Well it's a bit too far too ride so the transportation costs go up.  I really enjoy seeing movies and checking out Japanese cultural events.  After all if I move back to the USA I can't watch the Yokohama Baystars (our local baseball team) lose every game (it's still a lot of fun), nor could I visit the Cup Noodle Museum.  I like these experiences and that's what I'd rather spend my money on.  I'm going to try to be smarter about my Entertainment choices this year but that will be concerning the things surrounding it.  Possible savings:  0.00

OTHER - I'm throwing anything under $1000 into Other.  Presents come up here as I usually print a Christmas album for my family every year which costs around $250.  I could probably do it for cheaper but I like iPhoto and it's a personalized gift that I think my family really appreciates.  I usually order nine of them and ship this all to one location and then have them sent out to individual family members from there.  It is much cheaper to do this than to have Apple send them out individually as they like to make money on shipping.  Alcohol came in around $500 last year.  This will probably reduce itself naturally as I'm just drinking less at home and in general.  At 31 my body is telling me I'm not 21 even if I like to pretend I am.  Car and gas should be zero this year as I won't be driving even a single mile (that is the plan anyway).  All of those other little slices of pie are basically categories I started but abondoned.  Possible savings:  $500.00~$600.00

So totaling up all of those savings bring us to a grand total of:  $7020~$7720!  I have the potential to reduce my yearly spending by almost one third.  I'm not anywhere near MMM style badassity, but the great thing is is I don't have to be to reach my goals.  And just imagine in 10 years that's more than $70,000!  Even with reducing my expenses by $7,000 a year I would still be living a pretty awesome life!  A lot of it is preventative maintenance (floss, clean my bike chain once a month, say "No" sometimes) and very easily achievable I think.

Bring it on 2013!  I'm ready for ya!

Bike Update

I haven't talked about my bike for a few months. Not because I haven't wanted to! Here is my bike again:

OKINAWA TRIP
I went on my first trip ever this last winter with my GF to Okinawa. We biked from Naha to around Mt. Onna. Unfortunately I am still a complete novice at biking and didn't know what warning signs to look for before taking a big road trip. The tread on my rear tire worn off to the point that the tire was bald. This led to a flat tire. I didn't have any spares (a mistake I will NEVER make again) but did have a patch kit. I had successfully patched the tube however I ripped it when pumping up my tire. We had to abandon the bikes and use a bus for a few days until we could come across a bike shop. We eventually recovered our bikes and made our way back to Naha (only to have our flight canceled) and returned safe and sound.

Our path we took on our bikes

I learned a lot on this trip. For example we need to schedule more time. When you bike for four to six hours you don't really feel like going out sight seeing that same day. A few extra days to buffer the riding would have been great. Of course I also learned to be more prepared. ALWAYS bring extra tubes with you and a patch kit.

BIKE FINANCIALS

Of course it's fun to ride on a bike I've also spoken a lot about the financial advantages of owning a bike. The last time I wrote about how my bike will actually pay for itself creating a bicycle that figuratively spits dividends from it's spinning wheels. How is this going? Well, I've had to invest more into some tools for the bike but I think I am still on track to a zero financial cost.

Expenses as of last update:
Bike $ 1,000.00
Lock $ 360.00
Pump $ 37.50
Pedals $ 20.00
Handle Bar Bag $ 126.73
Fenders $ 60.64
Lights $ 40.00
Breaks $ 62.50
Transportation $ 10.50

New expenses:
Knog Lights $ 100.00
Bike Bag $ 162.00
Map Case $ 30.00
Break Cleaner $ 3.65
Chain Cleaner $ 12.00
Brushes $ 5.00
Lube $ 8.00
Tire $ 40.00
Tubes $ 50.00

This is a table of all bike related expenditures up to this point. They add up to $2128.52. As of the last posting I had received payments of $377.50 in transportation reimbursement. In addition I have received two $10 payments from Gympact totaling $20.00. This puts me at $397.50 my bike has made me and another $1731.02 until I reach the break even point on this investment.



Some of the new expenses included brighter lights so that I can be seen at night, travel bags so we can take our bikes on trains and planes, cleaning tools and lube, as well as new tubes and spare tubes just in case.  I estimate that I will also pick up a rack and other kinds of funky bags to hang off of those racks at same time in the future.



My time line is 2 years to have this investment break even.  I'm pretty excited!

Expenses December-January and 2012 Dividend Round Up

あけましておめでとうございます！(Akemashiteomedetougozaimsu!)

Happy New Years to all!  I hope that 2013 brings anyone reading this lots of happiness and health!  After all what else is there?

The GF and I finished off 2012 in the sunny and warm weather of Okinawa!  It was a great trip and our first experience biking for vacation.  We had our bumps along the way (ALWAYS bring spare tires!) but we landed on our feet thanks to the kindness of a few strangers and created memories that will last our whole life.  It was our first crack at what I would call a "frugal vacation."  We were there for six days and stayed mostly in guest houses and one night in a hotel.  These were mostly hits but one guest house was a complete miss and had almost completely destroyed my faith in guest houses.  In the end however it was great food, lots of drinks, and over 100km biked a piece.

So how did my finances fare for the last month of the year?  Let's take a look.

Income:
Pay Check:  ¥308,624  ($3810)
Part Time Job:  ¥28,216 ($348)
Xmas Party:  ¥10,000  ($123)
Total:  ¥346,840 ($4282)

This was a bit below my average for the year but beings I started to pay taxes half way through I can't complain.  I did more work during my winter vacation at my part time job and the xmas party playing Santa Clause helped as well.  Every yen is one more employee for me.

Expenses:



Obviously "Eating Out" was mostly our time in Okinawa.  I don't regret this at all as I'd never had Okinawan food before and eating is one of the pleasures of traveling.  The higher "Bike" expense was for nice bike lights and a travel bag so we could take it on the plane.  Next month should be the last time my "Bills" are as high as they are because I made a change to my cell phone plan which will be the topic of a near future article.

My savings rate took a big hit in December but to have a nice vacation I can't say I mind.  December landed a 26.77% savings rate.  Funny that one of my worst savings rates months for the year still lands me in the stratosphere of savers compared to the USA in general.

For the year:
January  58.66%
February  65.25%
March 50.68%
April  -4.40%
May  63.14%
June  39.87%
July 40.08%
August  48.32%
September  41.74%
October 50.44%
November 51.39%
December 26.77%

For 2012:  44.55%

This is well below my goal of 65% and even more so below my revised goal of 50%.  But there were some trips, purchases, and medical expenses that I hope to avoid in 2013.

Dividends

Almost one year ago to the day I bought my first three stocks:  KO, JNJ, and VNQ.  I'll be honest I didn't really know what I was doing but I knew that I had to start building a bridge.  I wrote the risk of losing my money off as an investment in my education.  I had just cleared all my debts the previous month and figured losing money in stocks was actually worth more than a new flat screen TV or the latest widget/gadget hybrid egg boiler.

I remember when I got that first email from my online broker saying I was getting an $8 dividend.  Wow!  It didn't seem like much but at the same time I didn't have to do anything to get it.  I just put some money I would have normally saved into a company and a few weeks later someone is giving me $8.  It was at that moment I saw the cogs in the machine start to turn and I've never looked back.  My savings rate is a direct reflection of my desire to build a portfolio to retire on.

So how did I do?


1st Quarter:  $44.17
2nd Quarter:  $71.90
3rd Quarter:  $115.09
4th Quarter:  $167.72
Total:  $398.88

That's an extra $400.  Have you received a $400 bonus lately?  I don't mean for working I mean just for stashing your cash in some well known companies?  Plus that doesn't include the appreciation in value my money has received.  But that doesn't really matter to me as I'm not looking at selling.  The greatest upside is the companies I own have long track records of paying and increasing dividends.  That means $400 is the LOWEST my dividends will every pay out.  Of course that's if I stopped investing right now.  But I'm going to keep on investing and watch that number grow.

I hope every reader has had a great year and all the best for 2013.

How To Invest From Overseas

Updates have been sporadic as things are busy.  I have a few posts that I want to work on but in particular I'd like to get this post out.  I've made and set goals for 2013 but that post will have to wait.

A reader, Chris, posted a comment asking how I invest in US equities while living in Asia (Yokohama specifically).  It made me pause and think as investing has become such a routine thing for me I forgot that there was a time when I myself also didn't know that path.  It's really not too difficult.  In fact if you're already sending money home to pay of credit cards, student loans, or for savings then you're 90% of the way there.  For the sake of completeness however let's start from the beginning before you even get on the plane.

The Long Journey Begins

You've got a job in Asia!  Awesome!

If you are reading my blog I'm assuming you are somewhat familiar with frugal living and that you have a desire to decrease your expenses, increase your income, and invest as much as you can per month.  I'm also assuming you probably just graduated from college and have some student debt and perhaps some if not a ton of credit card debt.  Moving to Asia isn't always cheap.  Maybe your employer didn't pay for your plane ticket, maybe you got stuck paying key money to your landlord, etc.  All of this can be sorted out in time.  But here is my personal opinion.

PAY OFF ALL DEBTS BEFORE STARTING TO INVEST.

This might just be me but I didn't feel comfortable having $25,000 in student loans at 6% and starting to invest in companies.  You might feel different about this and that is fine.  We all get to feel different about our debts.  But if something happened while I am here and I suddenly couldn't be making my loans payments I didn't want to be forced to sell my equities at a loss due to market timing.  Plus taxes.  Oh gawd taxes!  Your taxes will get even more complicated.

Another reason I suggest paying off your debts first is that it's great practice for investing.  If you have been sending 50% of your paycheck home to pay of debt then you have learned to live on only half your pay!  That's great!  It means once your debt it gone you are set at a 50% savings rate.  That puts you in the stratosphere of savings rates as far as US citizens are concerned.

This brings us to Step One:  How do I send money home?

Well I can only speak for myself and Japan at this point but I'm sure many countries will have similar methods.  These are methods I have used personally:

Post Office:  These guys are everywhere and you can send money home through them a couple of ways.  You can send a bank wire, or you can get them to print an actual check or money order and send the physical check to someone you trust to deposit it in your bank account.  The cost is ¥2,000 (or it was when I was using them) and they publish the rate you get so you will know how much money your yen is worth.  Drawbacks include:  It's not online so you have to go in each time, your bank on the other end might charge a receiving fee, if you use the physical check it could be lost or damaged or the person you thought you trusted turns out not so trust worthy.  Personally I think I used the Post Office only once.

GoLloyds:  This was my first online experience.  GoLloyds was also what most people I know used.  It's mostly online but you might have to visit an ATM if you can't wire money from your Japanese bank online.  The gist is you set up a GoLloyds account and then transfer money to it from your bank account.  They then forward the money to a foreign back account that you set up.  This can all be done online if your Japanese bank has online services.  The GoLloyds fee is ¥2,000 and your bank will generally charge you a fee as well to wire money to them.  My old bank charged me ¥500.  They publish their rates for the day each morning so you can see if you like it.  I used GoLloyds for a great long while.  If you get your friends to sign up you can get free transfers.  This is the most expensive that I would ever pay for sending money  home.

Xe.com:  This is no longer a viable option but I used to use them for sending money home.  They charged no fees except but I was still charged a fee from m bank in Japan (again about ¥500).  Unfortunately they shut down due to regulations changing.

So what do I use now?  Well like I said most people I know used GoLloyds but it's worth it to go outside of the norm and try to find something special.  That's what I did.  I now pay no fees to transfer money home.  How?  My part time job has a deal with Citibank and if I deposit my paycheck into my Citibank account I get free transfers.  In addition my bank back home is a credit union so I don't get charged on either end.  This is very important.

FEES WILL KILL YOUR CAPITAL!  Fees are literally like taking money and putting it in the toilet.  Take the time to find the cheapest method.  If your job doesn't have a deal with a bank find a company that does and get a part time job there.  Do what it takes to get the advantage.  If your bank back home is charging you fees show them the middle finger and sign up with a bank that won't.  It's more work up front, yes, but worth it in the long run.

Step 2:  Open a brokerage account

So you have a stable method for sending money home and you've paid off your debt!  Well like I said you are now 90% of the way there!  Next you need to open a brokerage account.  First before you do anything open a Vanguard account.  Personally I used my parents address in the states and signed up for online statements.  They don't need to know you are living over seas.  As long as you are giving them money.  Next I also have a brokerage account with optionsxpress.com.  I went with them as they were offering $100 to sign up.  They charge $8.95 a trade.  There are cheaper places out there but I'm happy with OX so far.  I might one day open an account with another broker but for now I'm okay.  Go to Google and google "online brokerage account" and choose a company.  Your trades should never cost more than what I am paying.

I think this is where a lot of people get held up.  My only advice is to just do it!  Be like Neil Armstrong and just take that first step.  It can be a hassle but again in the long run it pays off.

Step 3:  Buy Stocks

Once your account is open now it's time to buy stocks right?  Wrong.  Yep more hoops.  Once you have some money in your bank account in the US your brokerage account will verify it by putting in small deposits.  Then taking them out.  After that is verified you transfer some funds to them, say $1,000.  They will hold that money for three or so business days to make sure your not trying to pull a fast one on them and then you can trade.  Whew!  After a while once you've built up a relationship your brokerage might start letting you use your funds earlier.  OX now lets me trade with funds almost the next business day.  I wouldn't be surprised if this has something to do with your credit score as well so just FYI.

Step 4:  Sit back and keep the conveyer belt going.

Well that's about it.  You've found a cheap way to send money home, you've linked yourself to a brokerage account, and your ready to start trading.  What should you buy?  Heck!  That's a whole different blog post.  Frankly I like diversify so I take a dividend growth stocks/Jim Collins index trading approach.  It is with that that I would also like to reveal my portfolio.  This was suggested to me a while back that I should put it up but I was a bit concerned.  I think I've gotten over that now and will try to keep it updated.  As you can see I hold about half of my money in index funds at Vangard and the other half in individual stocks.  This is in now way financial advice.

Really, investing from overseas just adds one step which is sending money to an account back in the states.  It can be an expensive step however so be careful and look for good deals.  In addition if your paying debts off already just keep living the same lifestyle and putting money into investments.  The seems to take care of itself.

Please share any experiences you have in the comments with sending money home from overseas or any other investing stories.